Citron Research announced Wednesday that it will no longer short GameStop shares due to GameStop’s accumulated cash. The video game retailer announced Tuesday that it secured more than $2 billion in proceeds from its latest stock offering. GME stock fell Wednesday after jumping in early trading.
X
“Citron is no longer a seller of GME,” says the firm published on social networks Wednesday morning. “It’s not because we believe a turnaround in the company’s fundamentals will ever happen, but with $5 billion in the bank they have enough room to appease their cult shareholders.”
“While Wedbush has set a target of $11 today, we respect the irrationality of the market. After all, dogecoin remains a $20 billion entity,” Citron continued, citing the meme cryptocurrency.
Wedbush lowered its price target on GameStop stock from 13.50 to 11 early Wednesday and maintained an underperform rating on the shares, The Fly reported. The company discussed the completion of GameStop’s second stock offering within a month. Wedbush assumed that GameStop would complete the sale at an average price of 40 per share. However, on June 7 – the day of the offering – GME stock closed at 28 per share.
“Even though the increase in shares might temper the mob mentality, Citron will be watching from the sidelines for now,” Citron said in its post on X. “BTW…Kitty’s livestream was still an insult to the markets capital,” the message continues. , referring to Meme Trader Keith Gill’s June 7 live stream on GameStop stock. Gill, known as Roaring Kitty online, is a key investor in the meme stock rally and an early driver of GME’s rise in 2020 and 2021.
Money in the bank
Elsewhere Tuesday evening, GameStop said it generated $2.137 billion in proceeds after selling 75 million shares in an at-the-market stock offering announced June 7. -scheduled publication of results. GameStop said it plans to use the proceeds from the sale for general corporate purposes, which may include acquisitions and investments.
This was the second GameStop stock offering in less than a month. The retailer generated $933.4 million after selling 45 million shares in a previous offering announced on May 17.
Separately, GameStop also filed a registration statement with the SEC in mid-May. Shelf registrations allow companies to issue more shares for sale at a later date in one or more rounds.
The filing says GameStop’s charter allows it to issue up to 1 billion shares of common stock and up to 5 million shares of preferred stock. There were 306.187 million shares of GME common stock outstanding as of May 4.
GameStop said it plans to use future proceeds from the offering for working capital and general corporate purposes, as well as potentially investing in certificates of deposit (CDs) and Treasury securities. American.
GameStop Stock
GameStop stock fell 16.5% on Wednesday after surging in the morning. Shares rose 22.8% on Tuesday.
GME has surged 29.4% so far this month. The meme stock jumped 45% in 2024.
You can follow Harrison Miller for more stock news and updates on Twitter. @IBD_Harrison
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